The dollar extends its rise

By IBT Staff Reporter On 12/21/10 AT 6:26 AM

The dollar reversed its drop earlier today to rise above the opening levels on the US dollar index, which tracks the currency's performance against six-other major currencies. The Euro strengthened after China's Prime Minister stated that the country took Concrete Action to aid the European Union with the debt problem that affected and influenced the European shared currency throughout the year.

Meanwhile, the pound fell against the dollar after a report from UK showed that the government's borrowing exceeded forecasts, putting downside pressures on the cable to fall.

The Swiss Franc strengthened after exports declined in November, affected by the rise of the franc that reduced the appeal of Swiss goods abroad, causing recovery to lose steam in the country.

Moody's Investors Services downgraded Friday Ireland's credit rating by five levels, along with shifting the country's outlook to negative, while placing Greece's credit rating under review for possible downgrade.

The dollar since then, where investors still await the release of BOE Minutes report along with growth figures from the U.S. and U.K. later this week.

The Euro-Dollar pair traded higher after failing to breach the support at 1.3120 where it rebounded to record a high of 1.3201 and a low of 1.3111, meanwhile the pair is trading at 1.3256.

Expectations signal that the pair will ascend further, targeting the resistance at 1.3355 bit for these levels to be reached, trading must remain above 1.3185 levels, accordingly, if the pair breached the resistance at 1.3185 and sustained trading above it, it would pave the path for further bullishness, conversely, failed to breach those levels would place downside pressures on the pair to target the abovementioned support levels.

The Pound traded close to the opening levels of today at 1.5500 while setting a high of 1.5566 and a low of 1.5481. The pair continues fluctuating around the previously breached support level that has currently turned into resistance and is ascending towards 1.5540. Yesterday's closing was below this level and will maintain the bearish intraday trendtargeting 1.5425 then 1.5315, while keeping in mind the importance of building a base below 1.5540 in order for chances of resuming these expectations.

As for the Yen, the pair traded lower for the second day, at 83.66, while setting a high of 83.79 and a low of 83.54, compared with the opening levels of 83.76.

The bearish trend appearing on the pair's trading is gradually nearing from the intraday ascending channel's support around 83.25. Stochastic is giving off positive signs; accordingly, a bullish intra-day trend is still valid,which majorly depends on the breach of pivotal resistance 84.25.